This Pick Can't be Called for 7 Years

03/24/2017 2:50 am EST


Harry Domash

Publisher, DividendDetective and Winning Investing

Most preferred stocks can be called (redeemed) five years after the issue date. But the latest pick that we’re adding to Preferreds Stocks can’t be called for seven years.

That’s important because it’s paying an 8.0% dividend yield. So, with the call date seven years out, you’ll have two more years to collect its above-market dividend.

Chimera Investment (CIM) is a mortgage real estate investment trust (REIT) that invests in mortgages secured by single-family homes. 

Chimera Investment 8.00% Series B Fixed-to-Floating Rate Cumulative (CIM-B), issued 2/22/17, are preferreds that recently traded slightly below their $25.00 issue and call prices. 

The market yield and the yield to their 3/30/24 call date is 8.0%. The preferreds are cumulative meaning that Chimera is on the hook for any missed dividends. 

The preferreds are not credit rated, meaning only that Chimera did not choose to pay for a rating, not that they are necessarily more risky than credit-rated preferreds.

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